Jung Sook Lee v. Tenafly Associates LLC

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9328-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 28, 2012 -

Before Judges Sapp-Peterson and Ostrer.

This appeal involves the enforceability of a contractual waiver of a jury trial, and the appropriate remedy where a jury trial was conducted in contravention of the waiver. The trial court denied defendant's motion to strike plaintiff's jury demand. The court reasoned that defendant did not accept the jury waiver provision because it failed to place its initials next to plaintiff's on the line provided below the jury waiver provision. The case proceeded to trial by jury and plaintiff obtained a favorable verdict.

We reverse because a signature is not essential, as a matter of law, to manifest assent to a contract. We remand for the trial court to ascertain, notwithstanding the absent initials, whether defendant expressed an intention to be bound by the jury waiver. If defendant did so, then the court must determine, applying equitable principles we identify, if defendant is entitled to a new trial without a jury.

I.

The jury waiver appeared in a 2005 agreement to purchase a $1.5 million condominium to be constructed in Tenafly. A dispute arose between the parties, which we discussed at length when we reversed the trial court's order of summary judgment in favor of defendant, who is the developer and seller, against plaintiff, the purchaser. Lee v. Tenafly Assoc., LLC, No. A-0144-09 (App. Div. July 28, 2010). In short, plaintiff tried to cancel her purchase because of construction delays. She asked defendant to return her ten percent deposit plus almost $56,000 she paid for extras. Defendant claimed plaintiff was in breach and kept the payments as liquidated damages. We held "ambiguities abound" involving the contractual provisions governing the closing date, extensions and postponements of it, and the parties' respective notice obligations. Id. at slip op. 13. We remanded for trial. The jury waiver provision was not raised as an issue.

In plaintiff's December 2007 complaint, she demanded trial by jury. Defendant's February 2008 answer included a separate defense invoking the jury waiver and "reserv[ing] the right to move to strike the jury demand[.]" About a year later, the parties cross-moved for summary judgment. Shortly after our remand, the parties received an August 2010 order scheduling the matter for trial on October 25, 2010. Defendant then filed its motion to strike the jury demand.

The jury waiver provision, paragraph 22.7 of the purchase agreement, which accompanied a choice of forum provision, includes separate lines for initials, and states:

Seller and Purchaser(s) hereby submit to personal jurisdiction in the State of New Jersey in any action or proceeding arising out of this Agreement. The parties hereto waive trial by jury regarding any legal action arising from the negotiation or breach of this Contract. Purchaser's initials ___ Seller's initials ____

Plaintiff initialed the paragraph, but defendant did not.

The provision was one of several in section 22 of the agreement, which was entitled "Miscellaneous." Also included was an integration clause barring oral modifications and a provision expressly rejecting the rule of contra proferentem, pursuant to which ambiguous provisions are construed against their drafter, although defendant prepared the contract. At the end of the eighteen-page document were signature lines for purchaser and seller. Plaintiff apparently executed the agreement October 19, 2005. Defendant did not immediately do so.

Plaintiff availed herself of the attorney review period and, through her attorney, secured defendant's consent to several modifications of the agreement. Plaintiff's attorney included these changes in a letter agreement that he signed on plaintiff's behalf on November 2, 2005. He did not object to, nor seek to modify, the jury waiver provision. According to counsel's letter to defendant, "Upon my receipt of the fully executed signature pages, the statutory attorney review will be considered concluded and the Agreement finalized." Defendant's representatives signed the letter-rider on November 3, and the main purchase agreement on November 4, 2005. However, defendant did not initial the jury waiver provision.

In response to the motion to strike, plaintiff argued the provision was ineffective because defendant did not initial it. Alternatively, plaintiff argued the provision was unenforceable because she was not personally aware of it. She certified that although she relied on her real estate broker and attorney "to help me comprehend the substance of the contract," she was unaware of the jury waiver; "never knew what . . . 'right of trial by jury' meant[;]" and did not intend to waive a jury. Her real estate broker certified that she served as an intermediary for plaintiff and her attorney because "[p]laintiff ...

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